"There's probably some risk that an in-bathroom linen closet will gradually have to share space with toiletries, hair dryers and such." kmcg, you've got that part right. I should have mentioned that my bathroom linen closet not only has the linen for the master bed and bath, but also extra toilet paper, soap, all sorts of extra toiletries, etc. And I keep my laundry basket ont the floor of the linen closet. The closet shelves are so much more accessible than storing stuff under my small vanity. So I like having a linen closet in the bathroom.

Hmmm... given that you don't use the linen closet now and that if you relocate it to the right of the window you'd bump your knees on it, I do think I would just remove it and restore the window trim. It is kind of shoe horned in there as it is and even though it is old, it isn't that aesthetically pleasing. Keep the boards and hardware for use elsewhere. The wallpaper is truly hideous, so the first thing I'd do is remove it. Then you'll know what's going on with the wall. You could have a leak or an ice dam on your roof if there is a valley where the addition was added on and water running down the walls. Or, as you say, it could be from shower steam. Or, it could just be failed wallpaper paste! We removed old wallpaper, added two fans with vents to the outside and all new wiring in our 1913 bathroom without removing the old plaster. It can be done. What is in the space above the bathroom? Is the bathroom on an exterior wall? Do you have balloon framed walls? Gutting the walls and installing drywall creates an horrific mess and if you can repair and preserve the plaster while still obtaining the new vent and wiring, I'd do that. Actually, your shower tile looks to be in pretty good condition and (on my monitor) more beige than pink. I attached a link below to a kitchens thread that contains a link to antique baths about a quarter of the way down... those ugly tiles were in vogue back in the old days because people knew what colors to put with them. But, boy I see what you mean about the leaking. Looks like the floorboards under our old leaky toilet that kicked off our bathroom remodel. I'm no expert on showers, but it does look like you are going to have to tear it out and start over. Have you visited the "bathrooms" forum? It is very active and Kerdi is a frequent topic over there. A wooden bath tub. Not my cup of tea, but interesting. Everyone needs to have a way to soak. Our bathroom spaces were so small, and we don't intend to sell our house until we are ancient, so we just have two showers and we soak in our spa. Works for us. Cheers. Here is a link that might be useful: quirky kitchens thread w 1920s bath link

You could actually do a couple different things. You could have one rod and use hangers. You would have to fold them a bit to fit on the hanger and not drag on the floor, but that's usually how they come from the cleaners. For heavy cloths, use two hangers together for added strength. You could also hang multiple rods at slightly different heights and depths. If you have a walk in closet this works great, but will still work with a reach in. Hang the highest rod the farthest back, then one a bit lower and closer and even a third lower and closer than the second. Then you can hang the cloths right on the rod instead of on a hanger. I like the rod because of it's larger diameter it doesn't leave creases in the cloths. You can also overlap them on these rods. For optimum use of space, you'd need to use multiple rods and overlap. Is that totally confusing?!

There's little to gain in having this wider than 5.5 feet - especially when you are fitting a tub or a ready made shower pan. In front of the toilet - just get a decent hanging wall cabinet. Or a pair of school lockers - I grabbed 2 and put them in my new pool bath. They are 18" deep and have a ton of storage. Bathroom NOT DONE.... lol....